National Defense Authorization Act for Fiscal Year 2018--Motion to Proceed

Floor Speech

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Madam President, last week the Senate passed the bipartisan Defense Authorization Act. The world is a very dangerous place. This legislation is very important to keeping our country safe.

Another thing we need to do to keep America safe is to get the economy going and growing. We need a strong and healthy economy in this country, and we need it now. A strong economy means a strong country with enough money to pay for the defense needs that we have at this time.

Over the 8 years of the Obama administration, Washington doubled its debt. Why? Because our economy grew so slowly and the administration spent too much money. If this sort of thing continues, it is going to leave America in a much more vulnerable position.

America needs a stronger economy that grows faster. To get the kind of growth we need, we are going to have to provide real tax relief for America, for hard-working families, and for the economy. That means cutting tax rates, and it means simplifying taxes for everyone. If we get this right, we are going to be able to produce more jobs, Americans will have higher wages, more take-home pay, and we will have a stronger economy.

According to the Internal Revenue Service, Americans spend about 6 billion hours a year on taxes, just trying to prepare their taxes. Between businesses and individual families, we spend an average of 18 hours for every man, woman, and child in America, just trying to comply with Washington's complicated Tax Code. The National Taxpayers Union says that the total cost of all of this is $263 billion a year. That works out to about $800 for every person in America. This is not spending that does anything productive. It is just figuring out how much tax to pay, and how to do it in a way to send it back to Washington so that the IRS will not come knocking at your door--how to get your numbers right.

The instructions for last year's standard 1040 tax form were 106 pages long. These are the instructions--15 different worksheets for people to fill out just to try to fill out the forms. The people who can deal with this level of complexity are the ones who basically can afford to hire expensive accountants and lawyers, who then take full advantage of a very complicated tax code. It penalizes hard-working Americans who can't afford the high-priced help that helps them fill out and take full advantage of a complicated tax code.

We hear a lot about people who talk about how millionaires and billionaires are gaming the system so that they can pay less in taxes. If that is their concern, then maybe we should try to make this system simple enough that there is no system to game and everyone can understand it.

Just think about how much we could save this country if we simplify things even a little bit. All the time we could save, all the extra money in the pockets of hard-working American families--that would really help to grow the economy and do it quickly. It would also make life a lot simpler for most Americans.

If we also, at the same time as simplifying the Tax Code, lower the tax rates, that keeps even more money in people's pockets. It gives them more money to decide what to save, what to spend, and what to invest--money they can spend going out to dinner if they choose. They can invest it if they want, and save for the future. If they actually choose to spend the money by going out to dinner, that helps the economy around the community where they live. People at the restaurants have to hire additional servers, and they will then have money to pay their own bills. That is how an economy grows. That is how providing people with more money in their pockets helps an economy become stronger and healthier.

There is another important part of tax relief we need to remember. We need to be sure we solve a big problem with the taxes that not just individuals pay but that businesses pay. The reason we need to do that is because many people think of businesses as big, faceless companies, but the simple fact is that these businesses actually don't pay the taxes personally. People have to pay the taxes. That is because businesses pay taxes with money they get from their customers.

If the government says it is going to put a big tax on some company, that basically gets passed on to the workers there and also to the people who buy that product. The Congressional Budget Office looked into this. Their office looked into it, and they found that more than 70 percent of the cost of corporate taxes actually comes from the people who work for these businesses. Nearly 3 out of every 4 dollars they spend in taxes would have ended up going back to the workers to have that money--workers who are either buying products or workers working within the company. Maybe it would have been higher wages or better benefits or some other way that people would have gotten a benefit from the money that otherwise just gets collected and sent to the government.

Obviously, a big chunk of the money is from the workers, and another big chunk is from the consumers. If a family buys something, part of the price they are paying is to cover the taxes that business has to pay. The higher taxes mean higher prices for people who go to buy something.

The third way that people pay these business taxes is when they get paid by the people who own a share of the business. If you take a look, there are a lot of people on the other side of the aisle who like to talk about taxing the rich who own stock in companies that are all across our country. The only problem is, most of the people who actually own shares in these companies are far from rich. More than half of Americans actually own stocks in corporations that are paying these high taxes. Maybe they have an IRA, a retirement plan, a 401(k) through their work. Whatever it is, Americans who are investing for their future are also being taxed.

Some of the biggest owners of these corporations are actually the pension funds of public employees. That includes teachers, it includes firefighters, it includes people in every community around America. Taxes take away money that could make these pensions worth more. When the government takes taxes away, there is less money in the pension plans for our teachers, for our firefighters, for our first responders.

So it is a real problem that the corporate tax rates are so high because high taxes hold back the entire economy and hold back the entire country. If you look at the most developed countries around the world, the United States has the highest corporate tax rate of all of them. The average tax rate of all of these major countries around the world-- across the globe--is 24 percent. In the United States, it is 39 percent. We are 15 percent higher in tax rates than the average of the major countries around the world. So that is the top Federal rate, and when you include the average for State and local taxes, it gets you to 39 percent--24 percent versus 39 percent. That is how far out of the ordinary American taxes have become.

It is a huge disadvantage for American companies that are trying to compete on the world stage. Frankly, the reason we are at such a disadvantage is that other countries have been cutting their tax rates over the years. There was actually a time when the U.S. tax rates were fairly low, and other countries continued to cut theirs below ours. Now we are at a point that the average for developed countries around the world is at 24 percent, and the United States is at 39 percent. Places like Germany, Japan, and Canada have all cut their rates going back over the last 60, 70 years. We haven't done it here at all. Now it is time to do it.

It is one of the reasons our economy has been stuck with the slow growth rate that we had during the Obama administration. It is what we have seen over the last 8 years--a very sluggish economy with very little growth. If we can cut corporate tax rates, personal rates, that is going to really help stimulate the economy.
People pay taxes. It is the individuals who pay the taxes that in many ways run the government. Many people I talk to in Wyoming feel, rightly so, that the problem isn't that they are taxed too little; it is that the government takes too much.

We need to get the economy going, and we can do that by simplifying and lowering the tax rates. It is true that, with taxes, people actually struggle with trying to figure them out at the kitchen table.

I have talked to those folks at home. It is continually a problem--the simplification, as well as how much money the government takes from them. Taxes raise prices. Taxes chip away at retirement savings that people have.
Tax relief and simplifying taxes makes sense for American families.

It means more jobs. It means higher wages. It means a safer America and a stronger America. It is good for our economy, and it is good for all hard-working taxpayers and the families those taxpayers support.

Thank you.

I yield the floor.

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